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Monday, October 15, 2012

Sprint Sells 70% Stake To Japanese Company

Tokyo-based mobile carrier Softbank Corp. has reached a deal
with Sprint Nextel Corp. to acquire 70 percent of Sprint for $20.1 billion; the
largest ever foreign acquisition by a Japanese company.
The deal was announced today at a joint news conference in Tokyo by Softbank
President Masayoshi Son and Sprint Chief Executive Dan Hesse. The deal has been
approved by the boards of both companies, but still needs approval from Sprint
shareholders and U.S. regulators. Softbank said the deal is expected to be
completed by the middle of next year.
The deal will bring together the third biggest mobile carriers of both Japan
and the U.S., underlining the growth ambitions of Softbank.

Under
the agreement SoftBank $12.1 billion of the total will be distributed to Sprint
stockholders, with the additional $8.0 billion used as new capital to
strengthen Sprint’s balance sheet. Approximately 55% of current Sprint shares
will be exchanged for $7.30 per share in cash, with the remaining shares converted
into shares of a new publicly traded entity, New Sprint. Following closing,
SoftBank will own approximately 70% and Sprint equity holders will own
approximately 30% of the shares of New Sprint.

There
is no word yet on how – or if – the sale will affect Sprint’s sponsorship of
the NASCAR Sprint Cup Series. Sprint’s headquarters will continue to be located
in Overland Park, Kansas, and Hesse will continue as CEO of New Sprint and as a
board member. Three current members of
Sprint’s current board of Directors will serve on the 10-member board of New
Sprint.